Offering of new Rabobank Certificates to further increase capital buffers

Rabobank intends to increase its capital buffers. The bank is offering new Rabobank Certificates to retail and institutional investors to further strengthen and optimise its capital position. With this offering, Rabobank will accelerate the realisation of its targets in anticipation of an expected increase in capital requirements. The subscription period for retail investors opens today and closes on 16 January 2017 17:30h CET. A roadshow for institutional investors will take place in the coming days. The offered Rabobank Certificates may be issued at a discount to the current trading price. The minimum expected issue size is EUR 1 billion.

A strong capital base is one of the main pillars of Rabobank’s strategy. Therefore, Rabobank targets by 2020 a Common Equity Tier 1-ratio ("CET1") of at least 14% of its risk-weighted assets and a total capital ratio of at least 25%. As a result of the Rabobank Certificates offering and given an ongoing strong focus on CET1, total capital and loss absorbing capital, Rabobank has adjusted its target Additional Tier 1 layer to roughly 2% from 3.5% of its risk-weighted assets. This will further optimise the capital stack.
 
As the timing of the issuance is close to the publication of Rabobank’s annual results, Rabobank announces today that it expects that the group’s capital ratios at 31 December 2016 will be higher than the corresponding ratios as reported in the half year 2016 results. On 30 June 2016 the (transitional) CET1 ratio was 13.4% and the total capital ratio amounted to 23.5%.
 
Rabobank’s strong capital ratios are well above the current regulatory requirements and the intended issuance of Rabobank Certificates will further increase them. Rabobank also wants to inform investors that the result for the second half of 2016 will be negatively impacted by a non-cash impairment of Rabobank’s stake in Achmea of approximately EUR 700 million due to developments in the insurance sector. This impairment will be more than offset by a strong operational performance, low loan impairment charges and positive effects of the cost reduction programmes. Furthermore, this impairment has limited impact on the capital ratios.
 
Bas Brouwers, Chief Financial Officer: "Rabobank is traditionally one of the best capitalised banks in the world. The intended issuance will enable us to prudently manage our CET1 capital base in anticipation of the expected strengthening of regulatory requirements. In addition to the issuance, we will continue to reduce and optimise our balance sheet through the sale of loans to investors, develop lending opportunities which are less capital intensive and focus on our core business. This allows us to continue to serve our customers with mortgages and business loans and to keep on improving our performance in line with our ambition to be a leading customer-oriented cooperative bank in the Netherlands and in Food & Agri worldwide.”
 
Rabobank Certificates are certificates of Participations issued by Rabobank (through Stichting AK Rabobank Certificates). The Rabobank Certificates are perpetual instruments listed on Euronext Amsterdam and have a nominal value of EUR 25 each. The current total nominal amount outstanding is EUR 5.9 billion.
 
The Rabobank Certificates are the most subordinated capital instruments issued by Rabobank and qualify as CET1 capital. Distributions are fully discretionary. Rabobank currently intends to pay a distribution on the nominal value which equals to the effective return on the most recent 10-year Dutch state loan + 1.5%-point per annum with a minimum of 6.5% on an annual basis. The discretionary distribution is paid quarterly.
 
For this issuance, Rabobank has mandated an international syndicate of banks. In the Netherlands, Rabobank will act as Retail Coordinator and ABN Amro and ING will be involved in the retail offering.
Information on the issue of Rabobank Certificates can be found on www.rabobank.com/ir
 
Elements of this press release are considered by Rabobank as inside information relating directly or indirectly to Rabobank within the meaning of article 7 of the Market Abuse Regulation (EU Regulation 596/2014) that is made public in accordance with article 17 Market Abuse Regulation.
 
This press release is not for distribution, directly or indirectly in or into the United States. This press release is not an offer to sell Rabobank Certificates or the solicitation of any offer to buy Rabobank Certificates, nor shall there be any offer of Rabobank Certificates in any jurisdiction in which such offer or sale would be unlawful.
 
This press release and the offering are only addressed to, and directed in Member States (other than the Netherlands) of the European Economic Area (the “EEA”) at persons who are “Qualified Investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (“Qualified Investors”). For these purposes, the expression “Prospectus Directive” means Directive 2003/71/EC, as amended.
 
In addition, in the United Kingdom this press release is being distributed only to, and is directed only at, Qualified Investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and qualified investors falling within Article 49(2)(a) to (d) of the Order, and (ii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as “Relevant Persons”).
 
This press release must not be acted on or relied on (i) in the United Kingdom, by persons who are not Relevant Persons in the United Kingdom, and (ii) in any Member State of the EEA other than the Netherlands and the United Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which this press release relates is available only to (a) Relevant Persons in the United Kingdom and will be engaged in only with Relevant Persons in the United Kingdom and (b) Qualified Investors in member states of the EEA (other than the Netherlands and the United Kingdom).
 
Each prospective investor should proceed on the assumption that it must bear the economic risk of an investment in Rabobank Certificates. None of Rabobank or any of the banks involved with the offering make any representation as to (i) the suitability of the Rabobank Participations for any particular investor, (ii) the appropriate accounting treatment and potential tax consequences of investing in the Rabobank Participations or (iii) the future performance of the Rabobank Participations either in absolute terms or relative to competing investments.

Press contact

Hendrik Jan Eijpe

Press Officer

Telephone
+31 30 21 30869

Email
Hendrik-Jan.Eijpe@rabobank.nl

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